New York Probate Court

March 28, 2012

New York Trust and Estate Lawyers Can Help Obtain Preliminary Letters Testamentary

The New York Probate process has many different aspects and requirements. The probate of a Last Will begins with the preparation of a Probate Petition which is to be filed with the Surrogate’s Court. Many of the basic Surrogate’s Court forms can be found online at www.nyccourts.gov/forms/surrogates. The petition is usually filed with the Surrogate’s Court in the County where the decedent was domiciled i.e, where he or she maintained a primary home. So depending upon the decedent’s home, there may be a Westchester County Probate or Nassau County Probate, etc.

The Probate Petition is required to contain: (i) information about the petitioner, who is usually the Executor named in the Will; (ii) information about the decedent such as date of death, address and citizenship; (iii) information about the purported Last Will such as its date and the names of the witnesses to the Will; (iv) the identity of the decedent’s distributees i.e., next of kin; and (v) information about the value of the personal and real property comprising the estate.

In many instances the probate of the Will may be delayed. Probate is essentially the method by which the decedent’s Will is validated as authentic by the Court so that the Will provisions control the disposition of the decedent’s estate assets. This delay may be due to a number of circumstances such as difficulty in determining the decedent’s distributees that raise issues regarding kinship or a Contested Will that might result in Surrogate’s Court litigation lasting many months or years.

New York Trust and Estates attorneys are familiar with these types of delays and regularly counsel the named Executor to apply to the Court for appointment as Preliminary Executor. A Preliminary Executor is a temporary executor that can be appointed while other issues affecting the probate of the Will are resolved. Surrogate’s Court Procedure Act 1412 entitled “Preliminary letters testamentary” provides for this type of appointment. A Preliminary Executor typically has most of the powers that an Executor would have after probate is complete. Thus, a Preliminary Executor can collect the decedent’s assets, open an estate bank account, file estate tax returns, pay bills and expenses and generally engage in all aspects of Estate Administration. However, the Preliminary Executor does not have the power to distribute assets to estate beneficiaries.

The Court has the authority to deny the application for Preliminary Letters in the best interest of the estate. For example, if Objections were filed to such appointment and the Court found that the proposed Preliminary Executor’s actions raised bona fide questions of undue influence, breach of fiduciary duties, or other wrongdoing, the Court could appoint someone other than the nominated Executor in the Will.

In most Surrogate’s Courts such as Manhattan or Queens Surrogate’s Court, the appointment of the Preliminary Executor is not a lengthy process. The Court must be advised as to the assets and liabilities of the estate and can require the appointee to obtain a Surety Bond.

March 21, 2012

Estate Accounting In New York Finalizes the Settlement Process

by Jules M. Haas

The estate settlement process in New York involves a number of stages. The first stage is typically the appointment of the fiduciary. Where the decedent has left a Last Will, the Will must be probated. Throughout New York such as in Westchester or the Bronx, probate in the Surrogate’s Court can involve kinship issues, Will contests or proving the validity of a lost Will.

When a person dies without a Will or intestate, the process of appointing a fiduciary is known as an Administration proceeding. Proper New York estate planning should be done to avoid intestacy. Where there is no Will, the decedent’s estate is distributed to his or her next of kin or “distributees”. Many of the problems that can be faced in Administration proceedings, such as kinship hearings, have been discussed in previous posts in the New York Probate Lawyer Blog.

After the initial stage of appointing a fiduciary, the next stage in estate settlement is the actual collection of estate assets and the payment of estate expenses such as taxes and debts. This stage involves many issues regarding the decedent’s affairs including estate tax determination and possible Court proceedings regarding disputes with estate creditors or claimants. The numerous tasks involved in marshaling the decedent’s assets and administering the estate affairs can take many months. Once this phase of the estate is completed, the time has come to distribute the estate assets to the beneficiaries.

This final stage typically involves the preparation of a full Accounting which specifies all of the transactions entered into by the Executor or Administrator during the course of the estate. An estate Accounting contains a number of parts called Schedules, each of which contains different information. One Schedule shows the assets that a fiduciary collected while another Schedule shows the various expenses that were paid. Another Schedule shows the amount of estate assets that are currently available for distribution.

After review of the Accounting, the estate beneficiaries often agree to approve the Accounting informally or without a separate Accounting Proceeding in Surrogate’s Court. However, if estate beneficiaries do not agree, the fiduciary would then file the Accounting with the Surrogate’s Court in Queens or Manhattan or whatever County the estate is being administered in. The estate beneficiaries can then file Objections to the Accounting and the Court will make the final determination as to the validity of the objections.

Objections to the Accounting can include such items as breaches of fiduciary duty for commingling assets or misappropriation of funds. Other objections can relate to improper payment of expenses or losses sustained due to the decline in value of an estate asset. Following the approval of the Accounting by the beneficiary or the determination of the Court as to any formal objections, the estate assets can be distributed and the estate settled. A recent case decided by Manhattan Surrogate Nora Anderson on March 6, 2012 and reported in the New York Law Journal on March 19, 2012 entitled Accounting of Chase Manhattan Bank, provides an example of the many types of issues that can be raised in a Surrogate’s Court Accounting. Although this case concerned an accounting by Trustees of a revocable inter vivos trust, the issues included claims of underpayment of distributions and wrongful payments.

Formal Court accountings are typically long and complex proceedings. Most estates are settled out of Court. However, it is important that the fiduciary keep and retain good records and report the estate transactions to the beneficiaries in a clear and concise manner. Such actions by the fiduciary should result in a smooth ending to estate administration and distribution of assets to estate beneficiaries.

February 15, 2012

A New York Last Will May Require Proof Of Kinship

by Jules M. Haas

The New York Probate Lawyer Blog has discussed different areas concerning estates of decedents such as Last Wills, Kinship, Probate and Administration, as well as Article 81 Guardianships. In many instances there is a combination of issues and problems that estate beneficiaries and fiduciaries face before estate settlement can be finalized. A recent case entitled Estate of Veronica Tesler, decided by Kings County Surrogate, Diana A. Johnson on January 11, 2012 and reported in the New York Law Journal on February 6, 2012, provides a typical example of estate administration that faced many problems.

In Tesler, the decedent, Veronica Tesler, had been determined to be incapacitated prior to her death. As such, the Court had appointed Guardians for her person and property. Also, prior to her death, Veronica had signed a Last Will in which she left her estate to her nephew and appointed him executor.

While Veronica’s preparation of a Last Will was sound estate planning, the nephew predeceased Veronica. Apparently, Veronica did not provide for any alternate disposition of her property. The result was that she effectively died intestate (i.e. without a Will), because there was no provision in her Will for an alternate beneficiary. Tesler demonstrates that it is always best to provide for alternate beneficiaries in a Last Will as well as alternate Executors. The Brookyn Probate of Veronica’s Will was thwarted by this apparent oversight.

Since Veronica died intestate her estate beneficiaries needed to be determined by the intestacy statutes of New York. Here, Veronica’s maternal cousins filed a petition with the Court to obtain Letters of Administration. However, since the maternal cousins could not provide information regarding Veronica’s paternal next of kin (“distributees”), the Court appointed the Public Administrator to handle the estate affairs. The Public Administrator is a public official whose function is to administer estates in various circumstances such as where no family member or no family member of close enough kinship in the case of intestacy is available.

After the Public Administrator completed the administration of Veronica’s estate such as collecting assets and paying bills and debts, the Public Administrator filed an accounting with the Surrogate’s Court. It was at this time that the maternal cousins were required to demonstrate at a Kinship Hearing that they were Veronica’s sole distributees and entitled to receive her entire estate.

Kinship cousin cases can be very complex and require proof in the form of documents such as birth records, death records, marriage certificates, obituaries, census reports and also witness testimony to show which persons actually are the decedent’s sole surviving next of kin. I have represented clients in these proceedings. The use of professional geneologists and investigators is also essential in proving kinship.

In Tesler, the decedent’s maternal cousins were finally able to establish to the satisfaction of the Court that they were the decedent’s sole surviving heirs. The case shows how despite preparing a simple Will, very complicated estate administration proceedings may be needed to settle an estate. Advice from an experienced New York Estate attorney is essential both to prepare an estate plan that can avoid complicated litigation and to help family members succeed in protecting their inheritance rights.

February 1, 2012

New York Non-Marital Children Can Inherit From Their Father

by Jules M. Haas

A New York estate proceeding in the Surrogate’s Court requires the participation of all interested parties. First and foremost, a decedent’s distributees (next of kin) must be identified so that proper notice, usually in the form of a Citation or Notice, can be sent to the parties at their current address. A due diligence search must be made to determine both the identity and address of all distributees. Both Probate and Intestate Administration proceedings require that these parties be included in the case. Failure to properly include necessary parties in Estate proceedings, particularly where estate litigation is involved, can create a defect whereby the Court’s final determination may be subject to being found void.

The New York Probate Lawyer Blog has previously discussed issues involved where a decedent-father had children but was not married to the child’s mother at the time the child was born. These non-marital children – distributees – usually face an uphill battle to show that they are, in fact, children of the decedent, and that they are entitled to a share of the decedent’s estate or other rights they are given as distributees in the Court process.

New York Estates, Powers and Trusts Law Section 4-1.2 entitled “Inheritance by non-marital children”, sets forth the grounds and manner by which a non-marital child can demonstrate his or her relationship. The statute provides that a non-marital child “is the legitimate child of his mother.” However, with respect to his father, unless there is some Court Order or official determination of paternity, the most common avenue to prove kinship is to follow the statutory direction and provide “clear and convincing evidence” that “the father openly and notoriously acknowledged the child as his own.” The statute also provides for proof by “genetic marker testing.”

I have represented individuals who sought to inherit an estate where it was necessary to present evidence to the Court that satisfied EPTL 4-1.2. A hearing is commonly held by the Surrogate or a Court referee and documents and witnesses are presented to satisfy the legal requirements of open and notorious acknowledgement.

In a recent case decided by Westchester Surrogate Anthony A Scarpino on January 19, 2012 and reported in the New York Law Journal on January 27, 2012 entitled, Matter of the Estate of Michael Konstantin, issues regarding proper notice of Surrogate’s Court proceedings and proof of kinship of a non-marital child converged. In Konstantine, a proceeding was commenced by a non-marital child to vacate the probate of the decedent’s Last Will and the distribution of millions of dollars of wrongful death proceeds on the ground that the non-marital child was not included as a party to the prior proceedings and was entitled to receive a share of the proceeds. Based upon the evidence presented to the Court, the Surrogate found that the child presented some evidence that “the decedent openly and notoriously acknowledged the non-marital child as his own” and also showed that genetic marker testing was a proper method of discovery. Therefore, the Court directed that the decedent’s other children submit to genetic marker testing which has a high probability of showing whether the non-marital child had a common father.

Surrogate’s Court cases require the assistance of experienced estate attorneys who are familiar with the rules and procedures of estate settlement to protect the interest of the parties interested in a decedent’s estate.

December 28, 2011

New York Wills Probated After Validity is Established

by Jules M. Haas

Probate of Wills in New York requires the compliance with many provisions that are part of the New York Estates, Powers and Trusts Law (“EPTL”) and the Surrogate’s Court Procedure Act (“SCPA”).

First and foremost, EPTL Section 3-2.1 entitled “Execution and attestation of wills; formal requirements “sets forth the statutory mandates that must be followed for a Will to be validly signed. The statute sets out a number of requirements such as: (i) the Will must be signed at the end by the testator (3-2.1(a)(1); (ii) there needs to be “at least two attesting witnesses” (3-2.1(a)(c)(4) ); and (iii) the signature of the testator must be made in the presence of or acknowledged to the witnesses (3-2.1(a)(c)(2).

The formal requirements of the statute are quite extensive and variations or questions that may occur regarding compliance with these formalities often result in controversy and litigation. For example, what happens if all the steps are taken to prepare and execute a Last Will but the original of the Will cannot be located after the testator’s death. SCPA 1407 entitled “Proof of lost or destroyed will”, provides the process by which a Will can be admitted to probate under such circumstances.

In order for the probate process to be completed, the Court requires that the Attesting Witnesses provide testimony confirming that the signing of the Last Will complied with the formalities of law. This testimony can be live or, as is most often done, by sworn affidavit. However, what happens when one or more of the witnesses are deceased or cannot be located when the Will is being probated. SCPA 1406 entitled “Proof of will by affidavit of attesting witness out of court”, allows the witnesses affidavit to be used to establish the validity of the Will. This affidavit is usually made when the Will is signed and is known as a “self-proving” affidavit.

It is a common misconception that preparing and signing a Last Will is a relatively simple matter. As appears from the brief discussion herein and other posts in the New York Probate Lawyer Blog, failure to comply with the statutory rules for Wills can result in battles in the Manhattan Surrogate’s Court, or other Surrogate’s Courts throughout the State. The decedent’s intentions regarding an estate plan can be disrupted or destroyed. The rules and procedures, although complex and sometimes appearing to be archaic, are meant to provide certainty as to a decedent’s last wishes and prevent fraud and deception.

A recent case in the New York State Supreme Court, Onondoga County, Castor v. Pulaski, decided by the Honorable Anthony J. Paris on December 14, 2011, shows why the many safeguards to the probate process are necessary. Castor is an action to recover damages for fraud engaged in by individuals who attempted to defraud the Surrogate’s Court by filing and attesting to the validity of a fake Will. The plaintiff, who was the decedent’s son, actually withdrew his objections to the Will in view of the witness affidavits which were, unbeknownst to him at the time, false.

The Court granted compensatory and punative damages against the defendants and noted in its decision: “Based on Defendants’ track record, their testimony is totally incredible except for those portions wherein they admit that they willingly and voluntarily falsely acknowledged Mr. Castor’s execution of his Last Will and Testament when, in fact, they did not so witness his signature and he did not request them to sign as witnesses. They also admit to their subsequent execution of the Attesting Witness Affidavits on November 23, 2005, knowing that the information contained in said Affidavits was not true.”

The preparation, execution and probate of Wills, as well as proper estate administration, is complicated and involves serious consequences. Due diligence by all individuals and family members, as well as professional guidance from estate and probate attorneys, is essential.

December 21, 2011

New York Distributees May Be Adopted Persons and Interested in a Decedent’s Estate

by Jules M. Haas

The New York Probate of a Last Will and an administration proceeding for an intestate (no Will) estate each requires compliance with provisions in the New York Estates Powers and Trusts Law (EPTL) and the Surrogate’s Court Procedure Act (SCPA).

Among the most fundamental provisions of these statutes is the requirement that parties who have an interest in the proceedings receive proper notice so that they can appear in Court and protect their rights. In this regard, it is not always easy to determine or to locate all the parties whose interests must be disclosed to Court so that proper notice is provided to them.

For example, in both probate and intestate administration proceedings, all of the decedent’s distributees must be determined and located so that notice, usually in the form of a Citation, can be sent to them. A Citation is a paper issued by the Surrogate’s Court in New York, whether in Nassau County or Brooklyn or otherwise, in which the Court designates a date for the case to appear on the Court calendar and advises the party receiving the Citation to appear on such date in connection with the particular relief that is to be presented (i.e., probate of the Will).

The New York Probate Lawyer Blog has previously discussed some of the many issues that arise in determining interested parties such as questions regarding Kinship and problems faced by persons whose father was not married to their mother at the time of birth.

In a recent case entitled Matter of Cutler, which was decided on October 31, 2011 and reported in the New York Law Journal on November 14, 2011, Surrogate Edward W. McCarthy III (Nassau County) was presented with an issue concerning a biological child of the decedent. It appears that the child had been adopted by a stepfather after the decedent and the child’s mother were divorced. In connection with the probate of the decedent-father’s Last Will, the proposed Executor asked the Court to unseal the child’s adoption records so that the child could be located and given notice of the probate proceeding. As explained by the Court, notwithstanding the adoption of the child by the stepfather, New York Domestic Relations Law Section 117(1) provided that the adoption by the stepfather did not eliminate the child’s interest as a distributee of the child’s deceased parent. Therefore, the child remained a distributee of her father pursuant to EPTL 4-1.1 and was entitled to notice in the probate proceeding.

The Court allowed the unsealing of the records but appointed a Guardian ad Litem to supervise the process to protect the privacy of the adoption process.

As can be seen from Cutler the assistance of a Nassau Probate Lawyer was needed to advise the nominated executor with regard to probating the decedent’s Last Will. I have represented many individuals in probate and intestate administration proceedings regarding the identification and location of all parties who must receive notice and providing the Court with the information necessary to complete these cases. Estate settlement and administration often necessitates a full review of a decedent’s family history which requires extensive research. While thoughtful estate planning through the use of a Last Will and Living Trust may avoid some of these post-death problems, it is more often the case that such planning has not been done and estate administration is delayed and complicated while a search for interested parties is performed.

November 29, 2011

New York Inheritance Can Depend on Family Status Such As A Valid Marriage

by Jules M. Haas

The New York Probate Lawyer Blog has reviewed the many instances where family status or kinship can affect an inheritance. In a blog post dated November 22, 2011, there was a discussion regarding the determination of kinship in order to establish a person’s right to receive a share of a decedent’s estate.

Most cases in New York Surrogate’s Courts, including Manhattan Probate proceedings or Westchester intestate Administration proceedings, require that a decedent’s heirs be specified so that their rights are protected and the estate is distributed correctly.

It is not uncommon to find disputes among heirs and other estate beneficiaries concerning the validity of a claim as to heirship. Issues involving adoption, paternity, artificial insemination and other questions as to family relations can become fierce battles, especially where the outcome involves large sums of money in the form of an inheritance.

One particular area where controversy can occur is the determination of a decedent’s spouse. While it may appear to be routine to ascertain a person’s wife or husband, difficulties can arise, particularly where individuals live in many different states and countries during their lives all of which have different rules and recording keeping methods for marriages and divorces. The determination of a decedent’s surviving spouse is essential for many reasons. From a tax standpoint, the Federal and New York estate tax laws provide that assets passing to the surviving spouse qualify for a 100% marital deduction. A surviving spouse also has many rights under New York estate laws including the right of spousal election. A spousal right of election gives a surviving spouse the right to receive a share of the decedent’s estate notwithstanding that the decedent may have disinherited the spouse. The New York right of election is provided in Estates, Powers and Trusts Law section 5-1.1-A.

In order to invoke the benefits of the statute, an individual must, in fact, be the decedent’s surviving spouse. A recent case entitled Will of Newman decided by Surrogate John M. Czgier, Jr., in Suffolk County Surrogate’s Court on September 26, 2011 and reported in the New York Law Journal on November 1, 2011, shows how important it is to closely examine the facts supporting a claim of spousal status.

In Newman, the decedent’s spouse filed a right of election. It was determined after investigation that the surviving spouse and the decedent had gotten married on a date 3 months before the surviving spouse finalized a divorce from a prior marriage. Since the surviving spouse’s prior marriage was not dissolved before the marriage to the decedent, the marriage between the decedent and the claiming surviving spouse was void. Thus, the right of election could not be asserted due to the invalidity of the marriage.

New York estate planning is also affected by spousal rights. Wills and trusts can be drafted to take advantage of the estate tax marital deduction and bequests can be provided to insure that spousal rights are satisfied.

I have represented estate fiduciarys and claimants in situations where spousal claims must be determined and resolved. I also provide assistance to clients to develop estate plans that take into account a spouse’s right to share in an estate.

October 26, 2011

Steve Jobs Puts Real Estate in Trusts in New York

by Jules M. Haas

A recent article by Thomson Reuters details how the late Apple CEO Steve Jobs has done a good job of moving assets into trusts in order to keep them private from the public.

Jobs, who has a reputation for being secretive of his company’s products as well as his personal life, knew the advantages of will and estate planning when it comes to privacy and distribution of assets.There have been many examples of celebrities who have squandered millions they have earned during their careers because of poor planning and bad decisions. What isn’t reported in the media are the millions of everyday, middle-class Americans who do the same. Those from more modest means can still reap all the advantages by consulting with a New York estate planning lawyer. Even if you don’t have millions to leave behind, you should make sure your children, spouses and other survivors can deal with the stress of handling your estate issues without undue complications.

Jobs, the man who is credited with inventing or reinventing the personal computer, mobile phone, music business and tablet devices, died recently at age 56 of pancreatic cancer. Battling the illness for some years, he stepped down as Apple CEO in August.

Two years ago, he and his wife established trusts and put real estate investments in them. Trusts can minimize the amount of taxes survivors must pay and can keep the assets from being disclosed to the public in probate court.

On top of his shares of Apple, he had a fortune after selling Pixar to Disney, receiving $138 million in Disney shares in 2006. In September, Forbes estimated Jobs’ worth at $7 billion.

Public records show that Jobs and his wife own property in Palo Alto and two pieces of property in Woodside. In March 2009, those properties were put into two different trusts.

If a trust is used, even a publicly recorded will could have very little information. It could say that the assets in a trust are left to a trustee. And they would be handed out according to the trust provisions, which are typically private.

Whether you have millions of dollars or not, every person can benefit from from estate planning.

October 3, 2011

New York Probate and Administration Depend Upon the Domicile of a Decedent

by Jules M. Haas

The New York Probate Lawyer Blog has talked about many situations involving the probate of a decedent’s Last Will or the intestate administration of an estate where there is no Will. These proceedings comprise the most basic avenues for a decedent’s estate settlement.

However, even more fundamental, and as a preliminary step to commencing such proceedings, a determination needs to be made as to whether the New York Surrogate’s Court is the appropriate Court to initiate the case. If New York is not the proper forum, the Court will not allow the proceeding to be filed. It may be that another state (i.e., Florida, New Jersey), may be the proper place to file and administer the estate proceedings.

Choosing the proper forum or Court is not always an easy task. This choice of forum begins with a finding of the decedent’s “domicile”. Domicile is an extremely important issue since it will not only affect the location of the Court that is appropriate to process the decedent’s estate, it may very well determine the State law that controls the issues surrounding estate administration such as spousal and kinship rights. Domicile also affects many other issues such as taxation.

Domicile essentially refers to the place that is considered a person’s primary home. A person can have many different residences around the world but only one primary home or domicile. Domicile is defined in the New York Surrogate’s Court Procedure Act Section 103 (15) as “A fixed, permanent and principal home to which a person wherever temporarily located always intends to return.”

Domicile can be difficult to determine where a person has residences in more than one state or country and divides his or her time between these locations. Among the factors that a Court reviews in deciding an issue of domicile are where a person files state and local income taxes, and where a person has a driver’s license, voting registration, and other social and business connections.

As noted, domicile is important because it may determine various rights. For example, a decedent who is a domiciliary of New York will be subject to New York statutes for the purposes of determining the decedent’s distributees or next of kin. Statutes of a different state, for example, New Jersey, may differ from those in New York and specify different individuals or interests in a decedent’s estate. The result may cause variations in amounts inherited or even rights to an inheritance.

A recent example of the importance of determining domicile was seen in Matter of Ranftle, decided by New York County Surrogate Kristin Booth Glen on September 14, 2011 and reported in the New York Law Journal on September 23, 2011. In Ranftle a question arose concerning whether a decedent was domiciled in New York or Florida. The importance of this question centered around the fact that unlike New York, Florida would not have recognized the decedent’s same-sex marriage that took place in Montreal, Canada. Therefore, if Florida law controlled, the decedent’s spouse may have lost inheritance rights in the Court proceedings. After an extensive review of the numerous factual contacts the decedent had both in New York and Florida, Surrogate Glen determined that the decedent was a New York domiciliary.

As a New York Probate attorney I have reviewed many cases with clients where an initial determination must be made as to the proper Court in which to commence a probate or intestate administration proceeding. Additionally, a thorough review of a client’s domicile is imperative when preparing an estate plan so that the provisions of a Last Will or Trust will be in accordance with the relevant State laws.

September 1, 2011

New York Power of Attorney Issues Overlap Guardianship and Estate Matters

by Jules M. Haas

Brooklyn and Nassau estate attorneys, as well as those assisting their clients throughout all parts of New York State, are often confronted with a myriad of issues relating to Powers of Attorney, Health Care Proxies, Article 81 Guardianship and estate settlement.

In a typical situation, an individual may have prepared a Last Will while at the same time preparing a New York Power of Attorney and a Health Care Proxy. The New York Probate Lawyer Blog has previously discussed the importance of preparing advance directives such as a Power of Attorney and Health Care Proxy by which others can be appointed to handle a person’s property and health care issues in case of illness or incapacity.

All parties involved in these matters should be particularly aware that agents appointed in a Power of Attorney and Health Care Proxy have similar fiduciary duties to act appropriately as do Court appointed fiduciaries such as Article 81 Guardians and Executors and Administrators. In many instances, questionable conduct by these lifetime agents may end up being reviewed by a Court in a Guardianship Proceeding or in proceedings in the New York Surrogate’s Court after the appointing person dies. Issues regarding property transfers, expenditure of funds, and the change of names or beneficiaries on bank accounts, life insurance and retirement funds can result in disputes that overlap lifetime and post death periods.

A recent lawsuit entitled Kaufman v. Kaufman, in New York State Supreme Court, New York County, provides an excellent example of the problems and issues that can arise in these situations. Kaufman involved two brothers, Allen and Kenneth, both of whom were appointed as agents in a Power of Attorney by their father, Hyman. Allen and Kenneth were also Co-Trustees under family trusts. Hyman, who had suffered a brain injury, had been in a nursing home for a number of years.

Allen petitioned the Court for an accounting and requested among other things, that Kenneth be removed as attorney-in-fact under the power of attorney and as a trustee for violating his fiduciary duties. As recounted by the Court, Allen claimed that Kenneth was “refusing to share financial information, failing to provide a complete record of financial transactions, and using Hyman’s assets for personal and business purposes.”

Following a review of the parties assertions, Justice Donna Mills in a decision dated August 4, 2011, directed Kenneth to provide an accounting of his activities pursuant to New York General Obligations Law Section 5-1505. This Statute, entitled “Standard of Care: fiduciary duties; compelling disclosure of record”, requires in paragraph 2(3) an agent under a power of attorney “to keep a record of all receipts, disbursements, and transactions entered into by the agent on behalf of the principal and to make such record and power of attorney available to the principal or to third parties at the request of the principal”
It is apparent that issues involving fiduciary duties and the safeguarding or misuse of assets can overlap from the lifetime stage to a post death estate settlement controversy. Suppose Hyman had died prior to the resolution of the Supreme Court case. In such event, questions regarding the propriety of Kenneth’s acts might need to be resolved in the Manhattan Surrogate’s Court as part of the administration of Hyman’s estate.

I have counseled clients, both fiduciaries and beneficiaries, in many situations similar to those raised in Kaufman. The appointment of lifetime agents, as well as executors and trustees, requires thorough consideration and the problems faced by the fiduciaries and those whose interests they are protecting can arise and require resolution in many different forums.